ABU DHABI, United Arab Emirates--(BUSINESS WIRE)--The China National Petroleum Corporation (CNPC), the world’s third
largest oil company, has been awarded stakes in two of Abu Dhabi’s
offshore concession areas following the signing of agreements with the Abu
Dhabi National Oil Company (ADNOC) today.

Under the terms of the agreements, CNPC, through its majority-owned
listed subsidiary PetroChina, has been granted a 10% interest in the Umm
Shaif and Nasr concession and a 10% interest in the Lower Zakum
concession.

PetroChina contributed a participation fee of AED 2.1 billion (US $575
million) to enter the Umm Shaif and Nasr concession and a fee of AED 2.2
billion (US $600 million) to enter the Lower Zakum concession. Both
concessions will be operated by ADNOC Offshore, on behalf of all
concession partners.

The agreements were signed, in Abu Dhabi, by His Excellency Dr Sultan
Ahmed Al Jaber, ADNOC Group CEO and His Excellency Wang Yilin, CNPC
Chairman. The agreements have a term of 40 years and are backdated to
March 9, 2018.

H.E. Dr Al Jaber said the expanded collaboration with CNPC further
strengthens and deepens the strategic and economic relationship between
the United Arab Emirates and China, the world’s second largest economy.
“Energy cooperation is an increasingly important aspect of the UAE’s
relations with China, the number one oil importer globally and a major
growth market for our products and petrochemicals. These agreements are
new milestones in ADNOC’s thriving partnership with CNPC and also
represent an important platform upon which we can explore opportunities
further downstream.

“CNPC’s involvement in our offshore concession areas will help to
maximise the returns from what are very attractive, stable and long-term
opportunities. At the same time these agreements further underline the
international energy markets’ confidence in ADNOC’s 2030 growth strategy
as we accelerate delivery of a more profitable upstream business and
generate strong returns for the UAE.”

China's largest oil and gas producer and supplier, CNPC, through
PetroChina, produces 52% of China’s crude oil and 71% of its natural gas
production, and has exploration and production activities in more than
30 countries in Africa, Central Asia-Russia, America, the Middle East
and the Asia-Pacific. In 2016, PetroChina produced 772.9 million barrels
of crude oil and 3,464 billion cubic feet of natural gas in China.

In February 2017, CNPC was awarded an 8% interest in Abu Dhabi’s onshore
concession, operated by ADNOC Onshore. It also has a 40% stake in the Al
Yasat concession with ADNOC.

H.E. Wang Yilin said: “We are honoured to participate in the Umm Shaif
and Nasr, and Lower Zakum concessions. These agreements strengthen our
growing relationship with ADNOC, and will help to meet China’s expanding
demand for energy and contribute to asset portfolio optimization and
profitability enhancement of PetroChina. To promote development of the
assets, we will closely collaborate with ADNOC to deploy world class
engineering solutions and advanced technology to maximise recovery from
these two concessions.”

The Umm Shaif and Nasr concession, and the Lower Zakum concession have
been created from the former ADMA offshore concession, with the aim of
maximising commercial value, broadening the partner base, expanding
technical expertise, and enabling greater market access.

The Umm Shaif field’s Arab reservoir is characterised by a huge gas cap
– one of the largest in the region – with reserves rich in condensates.
The gas cap overlays an oil rim which, in combination with Nasr field,
has a crude production capacity of 460,000 bpd. ADNOC plans to process
500 million standard cubic feet of gas per day from Umm Shaif’s gas cap
to help meet Abu Dhabi’s growing domestic demand for energy. The
condensates, from the gas cap, will be refined to extract higher value
products that can be used in a variety of petrochemical applications.

CNPC joins Eni (10%) and Total (20%) as participants in the Umm Shaif
and Nasr concession; and an ONGC Videsh led consortium (10%), INPEX
Corporation (10%), Eni (5%) and Total (5%) as participants in the Lower
Zakum concession. ADNOC retains 60% majority shares in both concessions.

China is the world’s largest oil importer, with the UAE ranking tenth in
supplies to the country. While China grows its domestic refining
capacity and fills its strategic inventories, the country continues to
secure global crude supplies. By 2020, China’s oil consumption is
expected to reach 12 million barrels per day.

China and the UAE have made a number of co-investments in the energy
sector in the past year. In February 2017, the China National Petroleum
Corporation (CNPC) was awarded minority stakes in the UAE's onshore oil
reserves. And, in November of 2017, ADNOC and CNPC signed a framework
agreement covering various areas of potential collaboration, including
offshore opportunities and sour gas development projects.

Meanwhile, ADNOC is also focusing on downstream expansion in China and
Asia, where demand for petrochemicals and plastics, including
light-weight automotive components, essential utility piping and cable
insulation, is forecast to double by 2040. China is the largest export
customer in Asia, for Borouge, a petrochemicals joint venture between
ADNOC and Borealis, accounting for 1.2 million tons per year of
polyolefins, equal to one third of its sales worldwide.

Note to editors

The former ADMA offshore concession, which expired on March 8, 2018, has
been split into three separate offshore concessions, each operated by
ADNOC Offshore. Offshore concessions awarded or to be awarded are:

Concession Name

ADNOC Share

Partner Share

Target Production

Oil

Gas

Lower Zakum

60%

10% - ONGCVidesh-ledconsortium

10% - INPEXCORPORATION

5% - Eni

5% - Total

10% - China NationalPetroleumCorporation

450,000 bpd

Nil

Umm Shaif & Nasr

60%

10% - Eni

20% - Total

10% China NationalPetroleumCorporation

460,000 bpd

500 million scfd

SARB & Umm Lulu/

60%

20% - Cepsa

20% - to be announced

215,000 bpd

Nil

About ADNOC

ADNOC is a major diversified group of energy and petrochemical
companies, that produces about 3 million barrels of oil and 9.8 billion
cubic feet of raw gas a day. Its integrated upstream, midstream and
downstream activities are carried out by 14 specialist subsidiary and
joint venture companies. To find out more visit www.adnoc.ae